Anti-Kickback
Statute Defense

The Anti-Kickback Statute, 42 U.S.C. §
1320a-7b(b) is a criminal law that prohibits the knowing and willful
payment of "remuneration" to induce or reward patient referrals or
the generation of business involving any item or service payable by
the Federal health care programs (e.g., drugs, supplies, or health
care services for Medicare or Medicaid patients). Remuneration
includes anything of value and can take many forms besides cash,
such as free rent, expensive hotel stays and meals, and excessive
compensation for medical directorships or consultancies.

In some industries, it is acceptable to reward
those who refer business to a person. However, in the Federal health
care programs, paying for referrals is a crime. The statute covers
the payers of kickbacks-those who offer or pay remuneration- as well
as the recipients of kickbacks-those who solicit or receive
remuneration. Each party's intent is a key element of their
liability under the AKS.

Criminal penalties and administrative sanctions
for violating the AKS include fines, jail terms, and exclusion from
participation in the Federal health care programs. Under the CMPL,
physicians who pay or accept kickbacks also face penalties of up to
$50,000 per kickback plus three times the amount of the
remuneration.

Safe harbors protect certain payment and
business practices that could otherwise implicate the AKS from
criminal and civil prosecution. To be protected by a safe harbor, an
arrangement must fit squarely in the safe harbor and satisfy all of
its requirements. Some safe harbors address personal services and
rental agreements, investments in ambulatory surgical centers, and
payments to bona fide
employees.

Physicians are an attractive targets for
kickback schemes because they can be a source of referrals for
fellow physicians or other health care providers and suppliers.
Physicians decide what drugs their patients use, which specialists
they see, and what health care services and supplies they receive.

Many people and companies want a physician’s
patients' business and would pay doctors to send that business
their way. Just as it is illegal for physicians to take money from
providers and suppliers in return for the referral of their
Medicare and Medicaid patients, it is illegal for a doctor to pay
others to refer their Medicare and Medicaid patients.

The kickback prohibition applies to all sources
of referrals, even patients. For example, where the Medicare and
Medicaid programs require patients to pay copays for services, a
doctor is generally required to collect that money from his
patients. Routinely waiving these copays could implicate the AKS and
a doctor may not advertise that he will forgive copayments.
However, a doctor is free to waive a copayment if he makes an
individual determination that the patient cannot afford to pay or if
his reasonable collection efforts fail. It is also legal to provide
free or discounted services to uninsured people.

Besides the AKS, the beneficiary inducement
statute 42 U.S.C. § 1320a-7a(a)(5) also imposes civil monetary
penalties on physicians who offer remuneration to Medicare and
Medicaid beneficiaries to influence them to use their services.

The Government does not need to prove patient
harm or financial loss to the programs to show that a physician
violated the AKS. A physician can be guilty of violating the AKS
even if the physician actually rendered the service and the service
was medically necessary. Taking money or gifts from a drug or device
company or a durable medical equipment (DME) supplier is not
justified by the argument that a doctor would have prescribed that
drug or ordered that wheelchair even without a kickback.

Anti-Kickback enforcement will come in one of
three forms, (1) an administrative action by the department of
Health and Human Services, (CMS and OIG), (2) a qui tam
whistleblower case, or (3) a criminal action by the Department of
Justice. There is no bright-line test for determining when a
scheme will be prosecuted as a crime. Increasingly, the government
has shown a willingness to indict employees and officers of
corporations who conspire to pay kickbacks.

There are a number of defenses to Anti-Kickback
Statute cases. A defendant must exercise great caution in
selecting counsel who is knowledgeable in these defenses. Martin
Merritt is recognized as one of the nation’s leading lawyers in the
field of False Claims Act Defense tactics, and is a nationally
recognized Stark Lawyer located in Dallas, Texas. If you would like
to schedule a free consultation, please contact us.